Corn Commodity Futures

The primary uses for corn are: animal feed, food, alcohol, ethanol, industrial usage and seed. The grades of corn that are traded on the CBOT are mainly used for animal feed. The U.S. produces about 10-12 billion bushels of corn a year and is the leading exporter of corn.

Corn is planted during April and May in the United States and it is harvested during October and November. Iowa, Illinois and Nebraska are the top corn producing states. Corn is also used to produce ethanol, which has led to a strong increase in demand for corn.

U.S. Corn Consumption

Feed/Residual 57%

Export 19%

Ethanol 11%

High Fructose Corn Syrup (HFCS) 5%

Starch 2.5%

Sweeteners 2.2%

Cereal/Others 1.8%

Alcohol 1.3%

Seed 0.2%

In the United States, 57 percent of the crop is fed to animals, helping livestock producers deliver affordable, high-quality meat products to consumers. The livestock industry is the corn producers' leading customer. In 2003, beef cattle were fed more than 1.4 billion bushels, while hogs consumed 1.1 billion bushels and poultry another 1.3 billion bushels.

Eleven percent of U.S. production goes into ethanol, while another 19 percent or 1.9 billion bushels is exported. The balance of the crop is used for food, seed and industrial uses. Solvents, cleaners, deicers and plastics are just a handful of the hundreds of renewable, corn-based products we use every day.

Daily Price Limit $0.40 per bushel expandable to $0.60 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.

Tick Size (minimum fluctuation) 1/8 of one cent per bushel ($6.25 per contract)

Strike Price Intervals: Trading shall be conducted for put and call options with striking prices in integral multiples of five (5) cents and ten (10) cents per bushel. More details on strike price intervals are outlined in Rule 10A01.E.

Contract Months/Symbols: March (H), May (K), July (N), September (U) & December (Z); a monthly (serial) option contract is listed when the front month is not a standard option contract. The monthly option contract exercises into the nearby futures contract. For example, an August option exercises into a September futures position.

Daily Price Limit $0.40 per bushel expandable to $0.60 when the market closes at limit bid or limit offer. There shall be no price limits on the last trading day.

Last Trade Date The last day of trading in any standard or serial option for expiry in a given month shall be the last Friday which precedes by at least two business days the last business day of the calendar month preceding such option’s named expiry month. If such Friday is not a business day, then the last day of trading in such option shall be the business day prior to such Friday.

Exercise The buyer of a futures option may exercise the option on any business day prior to expiration by giving notice to the Clearing House by 6:00 p.m. Chicago time. Option exercise results in an underlying futures market position. Options in-the-money on the last day of trading is automatically exercised.

Expiration Unexercised Corn futures options shall expire at 7:00 p.m. on the last day of trading.